Ontario's hydro 'mess' sees power producer paid to sit idle: NDP MPP

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Ontario is paying another power generator big bucks to sit idle instead of producing electricity in the latest example of “complete mismanagement” on the part of the Ontario Liberals, says one New Democrat.

In January, Ontario’s Independent Electricity System Operator (IESO) asked the Iroquois Falls power plant to curtail its production of electricity for four months — but continues to pay the company the full amount stipulated in their contract.

“The government has created such a mess that everything they are trying to do now to fix it is ... essentially not making things better,” said Timmins-James Bay NDP MPP Gilles Bisson.

“We’re paying for stuff we’re not using,” he told the Toronto Sun. “We’re going to build brand new generation — they’re going out with contracts now to build more private power — when the system is completely over supplied.”

Northland Power runs the small Iroquois Falls cogeneration station. Located about 80 kilometres northeast of Timmins, the plant has a contract until 2021 and is capable of producing 120 MW of power.

Bisson accused the Grits of waste in its opening of new power plants while diminishing the use of these smaller ones.

“Why are we building brand new generation when we’ve already got it and we’re shutting down existing generation? It doesn’t make any sense.”

Several other small power producers across the province are also being paid not to produce electricity for up to a year because Ontario’s dysfunctional utility system is both struggling with excess electricity supply and pouring billions into costly wind and solar power generation.

Atlantic Power Corp. is idling plants in North Bay, Kapuskasing and Nipigon but will be paid until the end of its contract on Dec. 31, 2017. And TransAlta Corp. says its new contract provides a fixed monthly payment until Dec. 31, 2018, with “no delivery obligations.”

At the moment, Ontario’s large energy producers supply all the power that’s needed in this province, and in fact excess supply is routinely sold off at a loss to the U.S. and Quebec.

Chuck Farmer, the IESO’s director of stakeholder and public affairs, says they are trying to make the electricity production system in Ontario more efficient by having small energy producers generate power when there’s heavy demand, such as during the summer, rather than generating all the time.

“We have a need to be able to ramp energy up and meet peaking requirements,” said Farmer.

“We want them to run when the system needs them to, and not run when it doesn’t.”

Northland’s contract is up for renewal in 2021 and Farmer said “ultimately, it’s up to Northland Power on whether to run or not, based on market conditions.”

“We’re transitioning them to an arrangement that will provide more value for ratepayers,” he said.

The idea that paying a power plant to produce little-to-no electricity would save ratepayers money might raise a few eyebrows, but Farmer argues it is the case.

While labour costs of a facility will stay the same, a plant like the one in Iroquois Falls will not have to burn through as much natural gas and will save on maintenance costs.